Block That Chain: the impact of new technologies on Copyright industry

It’s common knowledge: among the different Intellectual Property Rights, Copyright law is a controversial area. Proof of ownership, Chain of titles, licensing schemes and collecting societies: these questions, relevant for any kind of property and Intellectual property right, turn into fundamental ones when coming to this specific subject. Whether you are listening to your Beatles playlist, watching the latest series on television or visiting the Tate modern’s coolest exhibition, one question is fundamental: “Who is the author?” In fact, the difficulty in proving the chain of titles, the number of people who might be regarded as contributors to the creation, together with the uncertainty of the notion of creativity itself and the pyramidal structure of any transaction have always been contributing over the time to the qualification of Copyright as a grey area.

This is the background . Now, let’s turn to the current situation.

What is the impact that technology and innovation-driven solutions might have on copyright law? I’m thinking about that kind of “distributed database”, commonly known as blockchain.In a nutshell, it consists of a digital platform for recording and verifying data, “a database that is maintained not by a single actor such as a bank but, collaboratively, by a number of participants”. Thus, a similar system, born for financial reasons, is likely to be successfully extended to any kind of business based on “globally networked data”. [1]In particular, there are two principal aspects of copyright law which blockchain is likely to affect. On one side, in the artistic as well as in the musical word, this technology might represent a fundamental instrument of authentication, allowing the validation of the identity of the creator and the clarification of the role of each contributor in the copyright chain through a crowd-sourced mechanism. More specifically, it has been said, by attributing a certain code, which cannot be modified, to each contributor, this tool could solve the issue of remix validity and recognition under copyright law, as the change of one single note would result in a totally different code. Working as proof of ownership, it would also help to split the title between different parties. The invention of “Blockai” constitutes an interesting example of a similar application[2]. This platform, in fact, automatically generates an ID certificate for the author, matching, for an indefinite period of time, the right holder with his/her work. Further, by using Instagram, it directly connects all the posts with the relevant hashtag to the blockai, allowing the client to check who is using the content. Secondly, it might constitute an alternative to the pyramidal, licensing-based copyright structure.In fact, third parties’ mediation in copyright industry, in the form of collecting societies(COS), has always worked as necessary authentication and validation instrument. COS’ role was supporting the authors, by guaranteeing transparency and fair remuneration in every transaction. However, in time, these societies have often been criticised for the lack of transparency in their structure as well as the inability of providing the authors with a fair remuneration without any delay. In other words, they were gradually turning into “a broken system”[3].

In this context, the potential role to be played by blockchain as a “transparent, redundant and opened paradigm for data storage”[4]is invaluable. Acting as immutable record-keeper, this tool would constitute a guarantee of unchangeable data, immediate payments and data aggregation. Further, the chain, compared to the traditional pyramidal model, would join its efficiency with the capacity of representing a decentralised solution. In doing so, it would present a democratic option, giving each author the opportunity of being personally responsible for the management of his own rights. This is the solution proposed by “Ujo”, an innovative platform whose declared purpose is “building a home for artists, that allows them to own and control their creative content and be paid directly for sharing their music talent with the world”. In this sense, a first attempt to demonstrate the power of blockchain was “Tiny Human”, the first song ever released on the chain, derived from the collaboration between the artist, Imogen Heap, and the platform.[5]

Proof of ownership and decentralised system for transactions : by presenting itself as a shared truth state in a distributed system, an immutable label of all the transaction, blockchain seems to be the solution to all the problems in the copyright industry. Further, following a maximalist view, it should be “taking over all the functions of collecting societies, rendering their service almost unnecessary”. But is this the reality?The risk, as always when coming to copyright, derives from the difficulty of conciliating the financial nature of blockchain with that grey area represented by copyright law, where legal elements overlap with non-legal considerations. In fact, it has been noticed, “a crowd-sourced validation of the identity of a transacting buyer is way more straightforward in financial services deal than in the world of music rights and IP, where it relates to less binary matters”. Secondly, also the actual ability to track and remove the infringement, as proposed in the “Blockai” model, is debatable. In fact, on one side, it has been argued that the technology would not be able to catch an image when used on Youtube nor to distinguish between an image and its hash; on the other, in order to actually remove the content, legal remedies should be activated. Further, at this stage, this young technology is not able yet to deal with big data aggregations and transactions[6].Thus, it is maybe too early to declare the end of collecting societies. Alternatively, different models could arise, based on the integration between COS and innovative ledgers. The Canadian Society of Composers, Authors and Music Publishers of Canada (SOCAN), has recently [7]announced a partnership with the start-up “Core Rights”, proposing the establishment of a private blockchain with smart contracts that represent each license that a venue takes. Such a solution would join the benefits of innovation with the stability of a model specifically conceived for copyright, able to take into account its double nature, at the same time global and local.

In the light of what has been said, let’s go back to our original question and let’s phrase it differently: “Will blockchain lock copyright chain?”

As Melanie Swan[8] , founder of the Institute of for Blockchain studies, argues “blockchain could be fundamental for the progress as Magna Charta or Rosetta Stone”. In this direction, the Blockchain Opportunity Summit was organised in New York on the 6th of December, with the purpose of exploring the potential benefits of these distributed ledgers. However, at this stage, it is still difficult to draw the line between the hype and the reality[9]. As someone would suggest, Copyright law is a Rubik cube … well, is it a registrable trademark, though[10] ?

[1] CREATE Working Paper 2016/05 “Blockkchain or the Chaingang? Challenges, opportunities and hype: the music industry and blockchain technologies”.

[2] “See also Ascribe”, used in art to prove that the work is original by comparing the hasch on the picture with the correspondant on the blockchain. In this way it gives the artist the opportunity to legally licence the work and spot the infringement.

[3] Revelator White paper “Blockchain: the operating system for music. A solution to the music copyright mess”.

About Author

Federica Pezza is a trainee lawyer, specialising in EU and IP law, currently working for the legal department of British American Tobacco(BAT) in London. After graduating at
University Federico II of Naples in 2015 with a comparative dissertation in EU law,
focusing on Copyright developments in Italy and France, Federica recently completed an LLM in Intellectual Property Law with a Distinction at Queen Mary University of London. Before joining the trademark department of BAT, she gained experience in the law tech area by working in a law tech London based start-up. Federica is a registered journalist in Italy and a French and English speaker.